Rimini Street Announces Fiscal First Quarter 2022 Financial Results
Rimini Street reported Q1 2022 revenue of $97.9 million, a rise of 11.4% year-over-year, with a gross margin of 62.0%. Operating income rose to $5.9 million, and net income reached $3.1 million, compared to a loss of $3.6 million last year. The Revenue Retention Rate improved to 94%, and active clients increased by 13.1% year-over-year to 2,884. The company raised its revenue guidance for the full year to $402-$411 million.
- Record revenue of $97.9 million, up 11.4% year-over-year.
- Operating cash flow increased by 87.2% to $45.8 million.
- Revenue retention rate improved to 94%, up from 91% last year.
- Cash position over $158 million, supporting further financial flexibility.
- Guidance for Q2 revenue range raised to $98.5-$99.5 million.
- Subscription revenue decreased to 98.3% of total revenue, down from 99.4% last year.
Quarterly revenue of
Gross margin of
Quarterly Billings of
Operating Cash Flow of
2,884 Active Clients at
Rimini Street Announces Fiscal First Quarter 2022 Financial Results (Photo: Business Wire)
“For the first quarter, we achieved record revenue, record first quarter invoicing and delivered a Revenue Retention Rate of
“For the first quarter, we delivered solid income statement and balance sheet results, including a higher year over year gross margin, operating income and Non-GAAP Operating Income. We ended the quarter with more than
First Quarter 2022 Financial Highlights
-
Revenue was
for the 2022 first quarter, an increase of$97.9 million 11.4% compared to for the same period last year.$87.9 million -
U.S. revenue was , an increase of$52.3 million 9.9% compared to for the same period last year.$47.6 million -
International revenue was
, an increase of$45.6 million 13.1% compared to for the same period last year.$40.3 million -
Annualized Recurring Revenue was
for the 2022 first quarter, an increase of$384.9 million 10.2% compared to for the same period last year.$349.3 million -
Active Clients as of
March 31, 2022 were 2,884, an increase of13.1% compared to 2,550 Active Clients as ofMarch 31, 2021 . -
Revenue Retention Rate was
94% for the trailing twelve months endedMarch 31, 2022 and91% for the comparable period endedMarch 31, 2021 . -
Subscription revenue of
, which accounted for$96.2 million 98.3% of total revenue for the three months endedMarch 31, 2022 compared to subscription revenue of , which accounted for$87.3 million 99.4% of total revenue for the same period last year. -
Gross margin was
62.0% for the 2022 first quarter compared to61.5% for the same period last year. -
Operating income was
for the 2022 first quarter compared to$5.9 million for the same period last year.$1.9 million -
Non-GAAP Operating Income was
for the 2022 first quarter compared to$12.1 million for the same period last year.$9.3 million -
Net income was
for the 2022 first quarter compared to a net loss of$3.1 million for the same period last year.$3.6 million -
Non-GAAP Net Income was
for the 2022 first quarter compared to$9.2 million for the same period last year.$8.5 million -
Adjusted EBITDA for the 2022 first quarter was
compared to$12.9 million for the same period last year.$10.7 million -
Basic and diluted net income (loss) per share attributable to common stockholders was a net income per share of
and$0.04 , respectively, for the 2022 first quarter compared to a net loss per share of$0.03 for the same period last year.$0.13 -
Employee count as of
March 31, 2022 was 1,681, a year-over-year increase of12.0% .
Reconciliations of the non-GAAP financial measures provided in this press release to their most directly comparable GAAP financial measures are provided in the financial tables included at the end of this press release. An explanation of these measures, why we believe they are meaningful and how they are calculated is also included under the heading “About Non-GAAP Financial Measures and Certain Key Metrics.”
First Quarter 2022 Company Highlights
-
Announced representative new clients who switched to, or existing clients who expanded their agreements with,
Rimini Street , including:-
Yarra Valley Water , the largest water utility inMelbourne, Australia -
Staffmark Group , a leading staffing and recruitment firm inthe United States - Breastscreen Victoria, an Australian government funded breast cancer organization
-
ICTSI, a global port operator headquartered in
the Philippines
-
- Closed more than 10,000 support cases and delivered nearly 18,000 tax, legal and regulatory updates to clients across 33 countries, while achieving an average client satisfaction rating on the Company’s support delivery of 4.9 out of 5.0 (where 5.0 is rated excellent).
-
Appointed Oracle, IBM and VMWare technology marketing veteran
Jeff Spicer as executive vice president and chief marketing officer. -
Announced the Company has combined its
North America andLatin America Theatres into a singleAmericas Theatre and new Theatre leadership team withEmmanuel Richard promoted to senior vice president and general manager. -
Former Oracle, IBM, HP and Lenovo senior executive,
Kevin Hooper , joinedRimini Street as group vice president andGM ofAmericas central region. -
Rimini Street Korea recognized as a Top 100 in
Korea Workplace including a Best CEO award forSeth Ravin and Best Workplaces for Women. - Presented at numerous CIO and IT and procurement leader events worldwide.
-
The Rimini Street Foundation supported charities across the globe through its giving program, donated employee time to community projects and launched the RMNI LOVE Grant Program to benefit charities in$50,000 Rimini Street's hometown ofLas Vegas, USA .
2022 Business Outlook
The Company is guiding to a revenue range of
Webcast and Conference Call Information
Company’s Use of Non-GAAP Financial Measures
This press release contains certain “non-GAAP financial measures.” Non-GAAP financial measures are not based on a comprehensive set of accounting rules or principles. This non-GAAP information supplements and is not intended to represent a measure of performance in accordance with disclosures required by
About
Forward-Looking Statements
Certain statements included in this communication are not historical facts but are forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are accompanied by words such as “may,” “should,” “would,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “seem,” “seek,” “continue,” “future,” “will,” “expect,” “outlook” or other similar words, phrases or expressions. These forward-looking statements include, but are not limited to, statements regarding our expectations of future events, future opportunities, global expansion and other growth initiatives and our investments in such initiatives. These statements are based on various assumptions and on the current expectations of management and are not predictions of actual performance, nor are these statements of historical facts. These statements are subject to a number of risks and uncertainties regarding Rimini Street’s business, and actual results may differ materially. These risks and uncertainties include, but are not limited to, the amount and timing of repurchases, if any, under our stock repurchase program and our ability to enhance stockholder value through such program; the impact of our credit facility’s ongoing debt service obligations and financial and operational covenants on our business and related interest rate risk, including uncertainty from the discontinuance of LIBOR and transition to any other interest rate benchmarks; the duration of and operational and financial impacts on our business of the COVID-19 pandemic and related economic impact, as well as the actions taken by governmental authorities, clients or others in response to the continuance of the pandemic; catastrophic events that disrupt our business or that of our current and prospective clients, including terrorism and geopolitical actions specific to an international region; changes in the business environment in which
© 2022
|
||||||||
Unaudited Condensed Consolidated Balance Sheets |
||||||||
(In thousands, except per share amounts) |
||||||||
ASSETS |
|
|
||||||
Current assets: |
|
|
||||||
Cash and cash equivalents |
$ |
158,046 |
|
$ |
119,571 |
|
||
Restricted cash |
|
419 |
|
|
419 |
|
||
Accounts receivable, net of allowance of |
|
91,288 |
|
|
135,447 |
|
||
Deferred contract costs, current |
|
15,714 |
|
|
14,985 |
|
||
Prepaid expenses and other |
|
17,087 |
|
|
16,340 |
|
||
Total current assets |
|
282,554 |
|
|
286,762 |
|
||
Long-term assets: |
|
|
||||||
Property and equipment, net of accumulated depreciation and amortization of |
|
4,519 |
|
|
4,435 |
|
||
Operating lease right-of-use assets |
|
12,498 |
|
|
12,722 |
|
||
Deferred contract costs, noncurrent |
|
23,107 |
|
|
21,524 |
|
||
Deposits and other |
|
1,760 |
|
|
1,786 |
|
||
Deferred income taxes, net |
|
63,358 |
|
|
64,033 |
|
||
Total assets |
$ |
387,796 |
|
$ |
391,262 |
|
||
LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT |
||||||||
Current liabilities: |
|
|
||||||
Current maturities of long-term debt |
$ |
3,664 |
|
$ |
3,664 |
|
||
Accounts payable |
|
3,620 |
|
|
5,708 |
|
||
Accrued compensation, benefits and commissions |
|
37,327 |
|
|
36,558 |
|
||
Other accrued liabilities |
|
22,451 |
|
|
26,124 |
|
||
Operating lease liabilities, current |
|
4,482 |
|
|
4,227 |
|
||
Deferred revenue, current |
|
248,503 |
|
|
253,221 |
|
||
Total current liabilities |
|
320,047 |
|
|
329,502 |
|
||
Long-term liabilities: |
|
|
||||||
Long-term debt, net of current maturities |
|
78,770 |
|
|
79,655 |
|
||
Deferred revenue, noncurrent |
|
51,526 |
|
|
47,047 |
|
||
Operating lease liabilities, noncurrent |
|
11,900 |
|
|
12,511 |
|
||
Other long-term liabilities |
|
2,852 |
|
|
2,933 |
|
||
Total liabilities |
|
465,095 |
|
|
471,648 |
|
||
Stockholders' Deficit: |
|
|
||||||
Preferred Stock, |
|
— |
|
|
— |
|
||
Common Stock, |
|
9 |
|
|
9 |
|
||
Additional paid-in capital |
|
149,420 |
|
|
149,234 |
|
||
Accumulated other comprehensive loss |
|
(2,910 |
) |
|
(2,724 |
) |
||
Accumulated deficit |
|
(222,702 |
) |
|
(225,789 |
) |
||
|
|
(1,116 |
) |
|
(1,116 |
) |
||
Total stockholders' deficit |
|
(77,299 |
) |
|
(80,386 |
) |
||
Total liabilities and stockholders' deficit |
$ |
387,796 |
|
$ |
391,262 |
|
|
||||||||
Unaudited Condensed Consolidated Statements of Operations |
||||||||
(In thousands, except per share amounts) |
||||||||
|
Three Months Ended |
|||||||
|
|
|||||||
|
2022 |
2021 |
||||||
Revenue |
$ |
97,910 |
|
$ |
87,895 |
|
||
Cost of revenue |
|
37,207 |
|
|
33,836 |
|
||
Gross profit |
|
60,703 |
|
|
54,059 |
|
||
Operating expenses: |
|
|
||||||
Sales and marketing |
|
31,700 |
|
|
30,383 |
|
||
General and administrative |
|
19,951 |
|
|
16,603 |
|
||
Impairment charges related operating right of use assets |
|
— |
|
|
393 |
|
||
Litigation costs and related recoveries: |
|
|
||||||
Professional fees and other costs of litigation |
|
3,499 |
|
|
4,763 |
|
||
Insurance costs and recoveries, net |
|
(389 |
) |
|
— |
|
||
Litigation costs and related recoveries, net |
|
3,110 |
|
|
4,763 |
|
||
Total operating expenses |
|
54,761 |
|
|
52,142 |
|
||
Operating income |
|
5,942 |
|
|
1,917 |
|
||
Non-operating income and (expenses): |
|
|
||||||
Interest expense |
|
(808 |
) |
|
(47 |
) |
||
Loss on change in fair value of redeemable warrants |
|
— |
|
|
(4,668 |
) |
||
Other income, net |
|
209 |
|
|
772 |
|
||
Income (loss) before income taxes |
|
5,343 |
|
|
(2,026 |
) |
||
Income tax expense |
|
(2,256 |
) |
|
(1,550 |
) |
||
Net income (loss) |
$ |
3,087 |
|
$ |
(3,576 |
) |
||
|
|
|
||||||
Net income (loss) attributable to common stockholders |
$ |
3,087 |
|
$ |
(9,845 |
) |
||
|
|
|
||||||
Net income (loss) per share attributable to common stockholders: |
|
|
||||||
Basic |
$ |
0.04 |
|
$ |
(0.13 |
) |
||
Diluted |
$ |
0.03 |
|
$ |
(0.13 |
) |
||
Weighted average number of shares of Common Stock outstanding: |
|
|
||||||
Basic |
|
87,124 |
|
|
78,733 |
|
||
Diluted |
|
88,485 |
|
|
78,733 |
|
|
||||||||
GAAP to Non-GAAP Reconciliations |
||||||||
(In thousands) |
||||||||
|
Three Months Ended |
|||||||
|
|
|||||||
|
2022 |
2021 |
||||||
Non-GAAP operating income reconciliation: |
|
|
||||||
Operating income |
$ |
5,942 |
|
$ |
1,917 |
|
||
Non-GAAP adjustments: |
|
|
||||||
Litigation costs and related recoveries, net |
|
3,110 |
|
|
4,763 |
|
||
Stock-based compensation expense |
|
3,051 |
|
|
2,233 |
|
||
Impairment charges related to operating right-of-use assets |
|
— |
|
|
393 |
|
||
Non-GAAP operating income |
$ |
12,103 |
|
$ |
9,306 |
|
||
Non-GAAP net income reconciliation: |
|
|
||||||
Net income (loss) |
$ |
3,087 |
|
$ |
(3,576 |
) |
||
Non-GAAP adjustments: |
|
|
||||||
Litigation costs and related recoveries, net |
|
3,110 |
|
|
4,763 |
|
||
Loss on change in fair value of redeemable warrants |
|
— |
|
|
4,668 |
|
||
Stock-based compensation expense |
|
3,051 |
|
|
2,233 |
|
||
Impairment charges related to operating right-of-use assets |
|
— |
|
|
393 |
|
||
Non-GAAP net income |
$ |
9,248 |
|
$ |
8,481 |
|
||
Non-GAAP Adjusted EBITDA reconciliation: |
|
|
||||||
Net income (loss) |
$ |
3,087 |
|
$ |
(3,576 |
) |
||
Non-GAAP adjustments: |
|
|
||||||
Interest expense |
|
808 |
|
|
47 |
|
||
Income tax expense |
|
2,256 |
|
|
1,550 |
|
||
Depreciation and amortization expense |
|
577 |
|
|
584 |
|
||
EBITDA |
|
6,728 |
|
|
(1,395 |
) |
||
Non-GAAP adjustments: |
|
|
||||||
Litigation costs and related recoveries, net |
|
3,110 |
|
|
4,763 |
|
||
Loss on change in fair value of redeemable warrants |
|
— |
|
|
4,668 |
|
||
Stock-based compensation expense |
|
3,051 |
|
|
2,233 |
|
||
Impairment charges related to operating right-of-use assets |
|
— |
|
|
393 |
|
||
Adjusted EBITDA |
$ |
12,889 |
|
$ |
10,662 |
|
||
Billings: |
|
|
||||||
Revenue |
$ |
97,910 |
|
$ |
87,895 |
|
||
Deferred revenue, current and noncurrent, as of the end of the period |
|
300,029 |
|
|
249,997 |
|
||
Deferred revenue, current and noncurrent, as of the beginning of the period |
|
300,268 |
|
|
256,933 |
|
||
Change in deferred revenue |
|
(239 |
) |
|
(6,936 |
) |
||
Billings |
$ |
97,671 |
|
$ |
80,959 |
|
About Non-GAAP Financial Measures and Certain Key Metrics
To provide investors and others with additional information regarding Rimini Street’s results, we have disclosed the following non-GAAP financial measures and certain key metrics. We have described below Active Clients, Annualized Recurring Revenue and Revenue Retention Rate, each of which is a key operational metric for our business. In addition, we have disclosed the following non-GAAP financial measures: non-GAAP operating income, non-GAAP net income, EBITDA, adjusted EBITDA and Billings.
The primary purpose of using non-GAAP measures is to provide supplemental information that management believes may prove useful to investors and to enable investors to evaluate our results in the same way management does. We also present the non-GAAP financial measures because we believe they assist investors in comparing our performance across reporting periods on a consistent basis, as well as comparing our results against the results of other companies, by excluding items that we do not believe are indicative of our core operating performance. Specifically, management uses these non-GAAP measures as measures of operating performance; to prepare our annual operating budget; to allocate resources to enhance the financial performance of our business; to evaluate the effectiveness of our business strategies; to provide consistency and comparability with past financial performance; to facilitate a comparison of our results with those of other companies, many of which use similar non-GAAP financial measures to supplement their GAAP results; and in communications with our board of directors concerning our financial performance. Investors should be aware however, that not all companies define these non-GAAP measures consistently.
Billings represents the change in deferred revenue for the current period plus revenue for the current period.
Active Client is a distinct entity that purchases our services to support a specific product, including a company, an educational or government institution, or a business unit of a company. For example, we count as two separate active clients when support for two different products is being provided to the same entity. We believe that our ability to expand our active clients is an indicator of the growth of our business, the success of our sales and marketing activities, and the value that our services bring to our clients.
Annualized Recurring Revenue is the amount of subscription revenue recognized during a fiscal quarter and multiplied by four. This gives us an indication of the revenue that can be earned in the following 12-month period from our existing client base assuming no cancellations or price changes occur during that period. Subscription revenue excludes any non-recurring revenue, which has been insignificant to date.
Revenue Retention Rate is the actual subscription revenue (dollar-based) recognized over a 12-month period from customers that were clients on the day prior to the start of such 12-month period, divided by our Annualized Recurring Revenue as of the day prior to the start of the 12-month period.
Non-GAAP Operating Income is operating income adjusted to exclude: litigation costs and related recoveries, net, stock-based compensation expense and impairment charge related to operating right-of-use assets. The exclusions are discussed in further detail below.
Non-GAAP Net Income is net income adjusted to exclude: litigation costs and related recoveries, net, loss on change in fair value of redeemable warrants, stock-based compensation expense and impairment charge related to operating right-of-use assets. These exclusions are discussed in further detail below.
Specifically, management is excluding the following items from its non-GAAP financial measures, as applicable, for the periods presented:
Litigation Costs and Related Recoveries, Net: Litigation costs and the associated insurance and appeal recoveries relate to outside costs of litigation activities. These costs and recoveries reflect the ongoing litigation we are involved with, and do not relate to the day-to-day operations or our core business of serving our clients.
Loss on Change in Fair Value of Redeemable Warrants: We have excluded the gains and losses on redeemable warrants related to the change in fair value of these instruments given the financial nature of this fair value requirement. We are not able to manage these amounts as part of our business operations nor are the costs core to servicing our clients and therefore we have excluded them.
Stock-Based Compensation Expense: Our compensation strategy includes the use of stock-based compensation to attract and retain employees. This strategy is principally aimed at aligning the employee interests with those of our stockholders and to achieve long-term employee retention, rather than to motivate or reward operational performance for any particular period. As a result, stock-based compensation expense varies for reasons that are generally unrelated to operational decisions and performance in any particular period.
Impairment Charges Related to Operating Lease Right-of-Use Assets: This relates to an impairment charge related to our leased assets for a portion of one of our locations as we no longer use the space.
EBITDA is net income adjusted to exclude: interest expense, income tax expense, and depreciation and amortization expense.
Adjusted EBITDA is EBITDA adjusted to exclude: litigation costs and related recoveries, net, gain (loss) on change in fair value of redeemable warrants, stock-based compensation expense and impairment charge related to operating right-of-use assets, as discussed above.
View source version on businesswire.com: https://www.businesswire.com/news/home/20220504005349/en/
Investor Relations Contact
+1 925 523-7636
dpohl@riministreet.com
Media Relations Contact
+1 708 556-3185
mmcglocklin@riministreet.com
Source:
FAQ
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